1. Field of the Invention
The present invention relates to processing magnetic indicia, and in particular, to methods and apparatus for correlating magnetic indicia for or stored on financial instruments with database records.
2. Description of the Related Art
Checks are one of the most common forms of making non-cash payment. However, the processing of physical checks can be manually intensive. It has therefore become common for checks to be electronically processed using electronic check acceptance (ECA) systems. For example, when a customer makes a purchase at a merchant's point of sale terminal, the cashier scans the magnetic ink character recognition (MICR) data, typically in the form of characters or indicia printed at the bottom of a check, using a check reader terminal. The MICR characters typically include the customer's checking account number. In addition, the MICR characters can include the drawee bank's transit or routing number, and the check sequence number.
The cashier manually enters the check amount using the point of sale terminal. The cashier may also capture an image of the check. The checking account number, other MICR data, the check amount, and other transaction related information may be sent to a check processing service. The check processing service then submits the MICR data, including checking account number, check amount and other related information to a check clearinghouse, such as the Automated Clearing House Network (ACH), which provides for the inter-bank clearing of electronic payments for participating depository financial institutions. The customer and/or check processor may first have to give authorization to have the check converted to an electronic check for ACH use. The clearinghouse instructs the issuing bank on which the check is drawn to deposit the necessary funds in the merchant's bank. The customer's account is then debited for the amount of the check by the debited bank and the merchant's account in correspondingly credited by the merchant's bank.
Unfortunately, the customer's account may have insufficient funds to cover the check, the check may have been stopped, or the account may have been closed. In such instances, or for other problems, the check is returned as non-payable by the issuing bank. Using conventional techniques, it is often difficult and/or expensive to locate the customer so as to obtain payment in lieu of or to cover the check. This is particularly true for checks that have been processed using ECA systems as the check processing service often does not have an image of the check with the customer's personal information. The check processing service will merely be informed that the check has not been honored and will be provided with the MICR information of the dishonored check. The check processing service does not know the personal identity of the person who wrote the dishonored check in order to seek payment. Thus, checks often go uncollected, resulting in significant financial loses on the part of merchants or check guarantors.